The IFS met Friday 7 February 2003 and Saturday 8 February 2003 at Western Oregon University.

The IFS heard from Senator Courtney (D, President of the Oregon Senate). He discussed the fact that the February 28 revenue forecast is not going to be flat - he expects it to be down by more than $90,000,000 and possibly more. He also expects the 15 May revenue forecast to be down as well. He expects to find one time revenue sources for the remainder of the biennium as there is not enough time for new taxes or revenue sources to be found.

He discussed the fact that we are taking apart our infra structure. He simply doesn't know what the 03/5 biennium will hold. He feels we are in deep deep trouble. He is not afraid to put a tax on the ballot - we need to get K-12 out of the general fund. There has to be a transportation plan involving additional registration fees or a gas tax or both. Pers is certainly going to get hit. Everything is on the table.

He felt that Higher Education had to take a global vision of the world as they understand the magnitude of the problem. He would like to see more provosts and deans and faculty talking at the legislature in terms of human and substantive problems. Images of people wo take the `cutting edge'. There is a real difference between a lobbyist and a person with real experience - sometimes they never deal with anyone but staff and lobbyists and they need a closer source of information to what is going on on an every day basis. This is unlike other states as it is a very accessible place.

The IFS also heard from Roger Basset on the State Board. He said that Peter Courtney leads from the heart. There is no obvious bottom in sight on the state budget. He is concerned by the cut and cap mentality that is driven by voters that tied up 5 special sessions in knots. We have a combination of 2 problems - the economy is driving the revenue down and we have a cut/cap mentality. He is encouraged by the rhetoric of leadership - that the anti government side may be letting up a bit. There is a general sense that we have taken the fat out. We now need a revenue source -- everyone but the governor is talking about it. But this will only stabilize spending - it won't restore things to a previous level.

How should we respond to that? Within the board, we are still developing an attempt to articulate the level of education below which we should not fall. And to discuss what would be lost. To refuse to let levels drift lower. He discussed the proposal called the deal

• Flexibility initiatives. The barn is on fire and we need to let the horses loose. Tuition setting responsibility.
• If we must turn students away, let it be from a quality education. Where we are now, we don't want to go below that. Look for specific measurements. The consequence might be enrollment limits in favor of quality. Pursuade the legislature. (At this point and subsequently in the discussion, many members of the IFS expressed skepticism. The Universities seem to be frantically INCREASING enrollment as a way to cover fixed costs and there is a danger in crying `wolf' -- saying to the public we will cut student enrollment and then doing just the opposite).
• If there must be a screening process, let it not be default by ability to pay. There is a clear responsibility of the State to support need in all post secondary education.
• Given smaller funding for post secondary education, there must be fewer barriers between the community colleges and higher education's. Create economies of scale - he doesn't see the bottom yet. THink of the dynamics.
• The surest way to save something is to promise to close it. The real danger is starvation

Mission differentiation and program appeal pay attention to the drawing cards of the University -- what attracts the students to you. THere is a pressure on anyone starting a new program that it should not come at the expense of programs which are central to the marketability of another institution.

With regard to PERS. The governor likes to fix things by bringing people together -- all the parties at interest -- to find breakthrough solutions which are not necessarily middle ground.

The IFS heard from Mark Perlman -- a representative of the Union at WOU. The step system is very unpopular with our administration but quite popular with the faculty. The Administration wants to dismantle it. There has been resistance to it all the way along. It is a sign of where things are going that mediation is no longer viewed as a last step but an accepted thing. Last time, we were close to a strike -- to position ourselves properly we needed authorization for a strike vote. It was obtained overwhelmingly with 90% voting in favor. (Remark: approximately 130 of the 230 faculty at WOU are members of the union). The step system has created salary equity across campus. There are departmental differences.

Representative Lane Shetterly (R, Dalles) then spoke. He chairs the revenue committee. He hopes and expects that facing the reality will force the session to get serious about structural changes in our revenue system as clearly it is broken. The Governor took the wind out his sails when he said he wasn't interested in revenue. It was a dispiriting start. The reality is we are headed toward a 28 February declining revenue forecast with another round of cuts. On the macro level, except for 3 states, 03/4 will be down from here. It is the worst recession since W.W.II. Perhaps Oregon will disconnect from the federal tax policy as that will help. WOn't free us from the economy.

We may already be behind the 8 ball - less of infrastructures and services. It is easy to be critical of the legislature and executive for the past 10 years. But we are not alone. Almost every state has exposed structural deficiencies in their revenue structure. All are going over the cliff except for a few revenue extraction states like Wyoming. Suggested digging an oil well from eastern Oregon to tap Wyoming gas. (joke). It may take 2-3 years to recover from this.

Sales tax could diversify and provide the 3rd leg of the stool. Smooth out the downturns. States with broad based sales taxes with no exemptions and low rates (services as well as goods) did a bit better. It is easy to administer but politically very difficult and economically quite regressive. As create exemptions, get more susceptibility to elasticities.

Have to administer sales tax -- not efficient. Other ways to do it. Statewide property tax. State has constitutional authority to do it. Politically not sure will is there. Will be on table in 3-4 months time.

Taxing business - compete with 50 other states - can't make ourselves less competitive. When the recession ends, don't want the recovery to pass us by. Some states are talking about getting out of the Higher Ed business - no whisper of that here. Truth is basic level of infra structure and services are essential - if don't have public safety and human services, will not attract business and job growth. Need to educate the public - lot to revenue and budget picture. Myths die hard - this is not a high tax state. Disappointed the Governor has not shown more leadership. Charted out a course of baby steps. Circumstances may force more. But the relationship is good - much more contact.

On Saturday February 8, Greg Monahan of the AOF spoke. The joint AOF/IFS/AAUP meeting is for 3 May 2003 at OSU - preliminary details are on the web. Essential to get a lot of faculty participation.

President Conn of WOU also spoke. He said there was confusion in Salem -- no firm answers. He spoke concerning some benefits that semester conversion might have. He said that the flexibility initiatives will impact institutions differentially. Smaller schools will not see windfalls. Should the state legislature continue to have input into tuition setting. He thinks there are signs of that.

In the discussion by various IFS Senators, it was mentioned that

1. PSU is probably going to try to opt out of PEBB.
2. At EOU, the ballots in the union election are due 1700 Monday February 10 in Salem.
3. Remark: The following message was received Tuesday 11 February from IFS representative Boretz who quotes EOU President Phil Creighton stating:

... the Employment Relations Board in Salem has finished tabulating the votes for or against representation through collective bargaining. A total of 117 ballots were cast, with the resulting count of 59 votes in favor and 53 votes against. All objections to the count must be filed by February 21, and assuming no votes are overturned, the vote will be ratified on February 24.

Respectfully submitted by Peter B Gilkey (IFS Senator).